Eurozone industrial production drops more than expected in May

Eurozone industrial production fell more than expected in May, according to the latest figures from Eurostat.

Industrial production dropped 1.2% from April versus expectations of a 0.8% decline. Energy production fell 4.3%, capital goods slid 2.3% and durable consumer goods output was down 1.4%.

Meanwhile, figures for April were revised up to show a 1.4% increase from a previous estimate of 1.1%.

Compared with May 2015, industrial production in the eurozone was up just 0.5%, missing expectations for a 1.4% jump.

In the EU-28 group of countries, industrial production fell by 1.1% from April but rose 1.1% on the year.

Dennis de Jong, managing director at UFX.com, said: “While a quick glance at year-on-year industrial production figures shows modest growth, monthly data for May clearly indicates the EU industrial sector was battening down the hatches ahead of the Brexit vote.

“The UK is a crucially important market for European exports, and ECB president Mario Draghi will be all too aware that the uncertainty surrounding Britain’s relationship with the EU will weigh heavily on the industrial sector.”

Stephen Brown, European economist at Capital Economics, said: “May’s sharp fall in euro-zone industrial production reversed almost all of April’s strong gain and suggests that industry will probably detract from euro-zone GDP growth in Q2.”